Bankruptcy Basics

Bankruptcy is a court protected plan to help consumers in financial crises to satisfy their creditors legally. The bankruptcy process protects individuals from repossessions, utility shut-off foreclosures, evictions, wage garnishments, or any other form of legal action regarding your debt.

Plans

Under the court’s approval, bankruptcy allows the debtor to work out a plan to pay their creditors as much as possible and eliminate the remaining balance. If you are in danger of losing your most significant assets like your family home, you may want to speak to a bankruptcy attorney to take action to stop the foreclosure.

The next step in getting financial relief is to determine what type of bankruptcy you should file. The kind of debt that you have, your assets, income, and expenditures will all be a factor in determining whether Chapter 7 or Chapter 13 bankruptcy is your best option.

Chapter 7

Chapter 7 is the simplest and most straightforward of personal bankruptcies. Chapter 7 is considered a straight, or liquidation bankruptcy and eliminates, or discharges your unsecured debt. Chapter 7 can eliminate all of your qualifying debt in as little as three to six months.

Chapter 13

This chapter of bankruptcy involves court-approved back payments to your creditors. With a Chapter 13 bankruptcy, you will be able to keep all of your assets. The payment plan will last either three or five years, depending on the amount of debt you have and your income.

If you would like more information on bankruptcy and how you can get financial relief, contact a Rio Grande bankruptcy attorney.